₹106 - That's What Analysts Think Restaurant Brands Asia Limited (NSE:RBA) Is Worth After These Results
Restaurant Brands Asia Limited (NSE:RBA) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenue greatly exceeded expectations at ₹8.4b, some 22% ahead of analyst forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Restaurant Brands Asia after the latest results.
Taking into account the latest results, the most recent consensus for Restaurant Brands Asia from five analysts is for revenues of ₹32.2b in 2027. If met, it would imply a credible 4.0% increase on its revenue over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching ₹2.10. Before this earnings announcement, the analysts had been modelling revenues of ₹32.9b and losses of ₹1.84 per share in 2027. So it's pretty clear the analysts have mixed opinions on Restaurant Brands Asia even after this update; although they reconfirmed their revenue numbers, it came at the cost of a noticeable increase in per-share losses.
See our latest analysis for Restaurant Brands Asia
Despite expectations of heavier losses next year,the analysts have lifted their price target 5.3% to ₹106, perhaps implying these losses are not expected to be recurring over the long term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Restaurant Brands Asia, with the most bullish analyst valuing it at ₹125 and the most bearish at ₹86.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Restaurant Brands Asia's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Restaurant Brands Asia.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Restaurant Brands Asia's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Restaurant Brands Asia. Long-term earnings power is much more important than next year's profits. We have forecasts for Restaurant Brands Asia going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Restaurant Brands Asia you should know about.
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